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Floating Storage: Is There a Second Wave?

Sept. 18, 2020

We couldn’t help but devote some time into assessing whether the recent “chatter” about a second wave of floating storage has the potential to become a reality and thus support tanker rates; rates which have been suffering by all accounts lately.  In short, we feel that there isn’t enough yet to warrant such a development, but as we have seen lately, stranger things have happened.

The conversation began when a well-known trader fixed at least 5 VLCC tankers on short-term time charters, presumably to be used for floating storage purposes - well after the observed peak in May-June (Figure ...

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The Time for VLCC Drydocking

Sept. 11, 2020

We have touched on the subject of drydocking and scrubber installations a couple of times this year so far.  The number of ships entering drydock to retrofit scrubbers or for regular maintenance has always been an important piece of the tonnage supply puzzle.  Especially in the VLCC sector, the market has historically shown a tendency to find some support when a large number of ships comes off the trading fleet.  A good example of that was the period August-September 2019 when we observed a flurry of scrubber retrofits in preparation for the IMO 2020 regulations. 

This year, the discussion on ...

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Another Motivator for Ship Deletions

Sept. 4, 2020

We have been following the news of the VLCC New Diamond that suffered from a boiler explosion and was set ablaze in the Indian Ocean, near Sri Lanka.  Of course, the main tragedy has to do with the one crew member out of a total of 23 who lost his life in the accident, but we can’t help but also consider the potential implications for the environment as well as the economic ones.  In the center of this accident, often overlooked, was the fact that the vessel was reported to be a 20-year-old tanker that was still operating normally ...

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The Hurricane Pattern on CPP Freight rates

Aug. 28, 2020

The Hurricane Laura has roared throughout the US gulf region this past week, resulting significant delays or closures in major ports and ship channels, especially in Louisiana. A chemical leak has also been reported near Lake Charles on Thursday with shelter-in enforced around the area.  According to Platts, two Lake Charles refineries and five more in Texas were closed in advance of Laura’s landfall, over 2.3 million b/d of refining capacity.  The five Texas refineries should restart soon after the safety inspections.

Simultaneously, the CPP freight rates have jumped phenomenally in the East side of Atlantic Basin ...

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What to Expect for the DPP Tanker Demolitions

Aug. 21, 2020

We have done a lot of work utilizing historical data to find a way to determine when a ship has a good probability of exiting the trading fleet based on age and other characteristics.  For example, in our analyses in the past, we have shown that 67% of 24-year old VLCCs in a given year exit the trading fleet and so on. Another interesting piece of information that can help paint a picture of the supply side of the tanker market is combining age information with known drydocking schedules.  This becomes especially important this year as due to the global ...

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